'State, Centre will jointly address Kerala's cashew crisis'

Is it true that Kerala floods adversely impacted the cashew market at the local and international level Also do explain in figures the statewise contribution at the national levelDue to substantial increase in the raw nut price as well as higher labour cost in Kerala and restrictions imposed by the banks more than 700 cashew processing units out of the total 834 were closed Around 50 units are on the verge of closure This has also reflected in the export of cashew kernel From April to June 2018 the estimated export was only 14330 MTs as against 23000 MTs reported during the corresponding period last year a dip of around 38 per centSources tell me most of the cashew dealers from Kerala have moved out of the business post the floods and some cashew processors have even committed suicide What measures are being taken to prevent such a situation in the futureAbnormal increase in raw nut price has invited huge operational finance forcing small entrepreneurs to pledge their houses as collateral security After 201415 the processing in Kerala has become nonviable largely due to the state government increasing wages by 35 per cent which has resulted in an increase in the cost of production by 45 per cent including perks Also limited financerestrictions imposed by banks have led to reduction in production and increase in overheads This increased the interest burden which drained the operational finance and units ended up in bankruptcy The crisis is to be addressed jointly by the state and central governments with active involvement of trade unions and financial institutions Bankers have been requested to share the interest burden by 50 per cent The balance is expected from the state governmentHow is the international market for cashew at presentDue to reduction in the raw material price from 2000 per MT to 1400 and adequate carry over stock of previous years crop from major producing countries the prices are expected to continue at this level The situation is expected to improve the raw material availability for processing and opening many of the closed units which will result in more employment opportunities and additional production to feed the marketWhat about the demand for cashew this festive seasonThe cashew industry is expected to get a better response in the domestic market The GST problem prevailed earlier has been subdued However surge in import under preferentialFree Trade Agreement largely by misdeclaration is also disturbing the market and depressing the price level Customs officials and CEPCI have taken adequate measures including sampling and testing to control import by improper meansLastly how has the dollar vs rupee battle impacted export and importBecause the cashew industry is largely dependent on import of raw cashew nut rupee depreciation will affect importers From April to July 2018 India has imported around 4 lakh metric tons as against the normal requirement of 89 lakh MTs the depreciation in rupees may affect the outflow Export of kernels during the next three months is not expected to be better than that in the previous periodAlso read Mumbai Cashew trade gets hit in festive season will get worse in coming monthsCatch up on all the latest Mumbai news crime news current affairs and also a complete guide on Mumbai from food to things to do and events across the city here Also download the new midday Android and iOS apps to get latest updates